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Ford Positioned for Future Growth

The steps Ford is taking now to cut costs and boost revenue could pay off in big dividends in the future.

October 24, 2022
Ford Positioned for Future Growth

The steps Ford is taking now to cut costs and boost revenue could pay off in big dividends in the future.

Credit:

IMAGE: Ford

2 min to read


They say what comes up, must come down. With Ford stock that is certainly bearing out.

Ford stock values rose 136% in 2021, but in 2022, its stock is down 44%. Ford blames this in part to the meteoric rise of stock values in 2021 but also to the weak stock market of 2022. Still, the company is at work positioning itself for the future.

The first area of change is in the vehicle lineup. Ford has returned the Bronco and Maverick nameplates to its offerings. Ford's entry into the EV market is also causing a stir among consumers. The automaker successfully introduced the F-150 Lightning, showing consumer want an EV pickup truck that can perform like gas-powered counterparts.

Cost cutting moves are also positioning the automaker for the future. Ford closed two assembly plants and an engine factory in Brazil in 2019. The moves heralded a restructuring strategy to end sedan production and exit the Brazilian market, which had cost Ford over $11 billion over the last decade. The closures allow Ford to divert money to more profitable ventures such as EVs.

Ford's stock price has been steadily declining in 2022. But the above actions show the company is pivoting toward the future.

However, automotive industry analysts predict a slump in sales for 2023 due to a production glut as supply chain shortages and chip production stresses ease. This may lead to a temporary depression in Ford's stock price, even with the demand for its EVs.

Still, Ford remains a profitable company. The automaker’s investment in the start-up Rivian has skewed the company’s bottom line to a net loss during the current fiscal year. But if investors can stay the course, Ford has a lot going for it. The steps it’s taking now to cut costs and boost revenue could pay off in big dividends in the future.

 

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